Voyager Digital’s legal team said it was “shocked, dismayed, disgusted” at having to reopen the bidding process for its distressed assets following FTX’s bankruptcy at a hearing yesterday.
The Voyager Official Committee of Unsecured Creditors announced last week that he reopened the bidding process and said in the press release that he had not transferred any assets to FTX US. But it noted that there is a $5 million “good faith” deposit from FTX US held in an escrow account. “We were shocked, displeased, devastated,” Joshua Sussberg said Tuesday during a Voyager bankruptcy hearing, according to a Bloomberg report. “There will be no deal with FTX, I think that’s pretty obvious.”
Had it not been for FTX Group’s bankruptcy, Voyager Digital’s creditors would have had until November 29 to approve or object to the restructuring plan. There was also a hearing scheduled for December 8 to possibly confirm the plan.
But now, “in light of the facts and circumstances surrounding the FTX bankruptcy, the confirmation hearing has been canceled, and the related voting and objection deadlines and other court-approved deadlines under the disclosure statement order are no longer in effect Voyager attorney Joshua Sussberg wrote in a notice filed with the court yesterday.
A disclosure statement is intended to give creditors insight into the debtor’s state of affairs so they can make an informed decision about whether to approve his restructuring plan. In this case, that disclosure statement and the plan would have included FTX US’s purchase of $1.4 billion in distressed crypto assets.
Now the bankrupt asset manager is rumored to be considering offers from one of the losers. People familiar with the matter said Financial News that Wave Financial and CrossTower have expressed interest, but neither company has confirmed.
Voyager Digital filed for bankruptcy in July, with more than 100,000 creditors to whom it owes between $1 billion and $10 billion. In June, the crypto-asset manager revealed that he had a $661 million exposure to now-defunct hedge fund Three Arrows Capital, which itself filed for bankruptcy on July 2.
In September, after rejecting what it called a “low-ball bid” from FTX, Voyager Digital accepted a $1.4 billion bid from the company to acquire its distressed assets. But now that FTX itself has filed for bankruptcy, which includes West Realm Shires, the FTX company that won the auction, it can no longer complete the deal.
FTX experienced a bank run last week after a report revealed how much of the FTX token, or FTT, its sister company Alameda Research had on its balance sheet. Once it became clear that about $5 billion of Alameda’s $14 billion in assets was tokenized, there was a flurry of withdrawals on the exchange that FTX couldn’t keep up with. FTX filed for bankruptcy on Friday.
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